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Bestar earnings fall 97.1% as revenue declines 17.1% in 3Q

By Furniture Today Staff -- Furniture Today, November 25, 2001

LAC-MEGANTIC, Quebec — Ready-to-assemble furniture maker Bestar reported a 17.5% drop in gross revenues and a 97.1% decline in earnings for the third quarter.

Revenue slid to C$14.3 million from C$17.3 million in last year's third quarter, while net earnings plummeted to C$13,000 from C$443,000.

For the first nine months, gross revenue was down 26.2% to C$47.3 million from C$64 million last year. Net earnings came to C$765,000, a drop of 78.3% from last year's C$3.5 million.

Paulin Tardif, chairman and chief executive officer, said Bestar "suffered from the impact of weak consumer demand and from the uncertainty related to the severity of the recession. Several major customers are still maintaining inventories at very low levels and are postponing new products."

He said the company is reviewing costs, decreasing capital expenditures and boosting sales, marketing and product development efforts.

"Given the persistently sluggish market and restrictive business environment, we expect results for the rest of the year to mirror those of the third quarter," Tardif said. "However, our sound financial situation and better market positioning should result in a strong turnaround once the economy recovers."

Positive developments in the third quarter included a new five-year agreement with union employees, and Bestar's new Signature line of home office and entertainment furniture, which was well received at the October market.

Julie Brault, marketing director, said the line will debut in Canada at the January Toronto market, which also will see the launch of a gallery program for traditional furniture retailers.

"While we are not abandoning the office superstores and mass merchants, we are focusing on new channels of distribution," she said.

•Bestar(a)
Quarter ended 9/30	2001	2000	Change
Revenues^(b)	C$14,282,000	C$17,303,000	(17.5%)
Operating income	632,000	1,393,000	(54.6%)
Net income	13,000	443,000	(97.1%)
Earnings per share	0.00	0.04	(100.0%)
9 months ended 9/30	2001	2000	Change
Revenues^(b)	C$47,292,000	C$64,046,000	(26.2%)
Operating income	2,995,000	7,531,000	(60.2%)
Net income	765,000	3,522,000	(78.3%)
Earnings per share	0.07	0.31	(77.4%)
^(a) In Canadian dollars. ^(b) Gross revenues.

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